A “Subject to Sale” offer?
I am asked this type of question quite a bit. Actually, most of the time the majority of the public thinks that this is a good option. I suppose they feel this way because we see it happen frequently. Time for some TRUTH (from a buyers’ perspective). The only time anyone should consider writing a “subject to sale” offer is IF they are prepared and/or able to remove all of their conditions at short notice. A subsequent buyer can come along and bump them… This happens ALL THE TIME and the buyer is left devastated! It’s human nature to want something that other people want. I believe when you write a subject to sale offer you are literally encouraging someone to bump you!
A couple KEY POINTS to point out here from the TRUTH GUY – that’s me ?
#1 – Realtors write subject to sale offers for 1 simple reason… they tie you up contractually with the listing of your home and the potential purchase of another. THAT’S IT! It is not in your best interest to do that. Your weakened negotiating position means someone can easily bump you. With a subject to sale there is always a “time clause”, usually 24 – 72hrs… This not enough time to remove all your conditions UNLESS you are already prepared to and/or in a good financial position. In fact, I just had someone bump someone with a subject to sale offer on one of my listed properties this past week!
It would be in MY best interest to help you write a subject to sale offer. However, it’s not in YOURS and that’s why I haven’t done it for about the past 8 years.
When I represent a SELLER and a realtor brings along a subject to sale offer, I always gladly accept it. I know that my seller will get more $, and it will probably bring along another buyer who wants in on the action. This doesn’t happen occasionally – it happens ALL THE TIME!
#2 – IF you need to sell your house in order to buy, and you see a place you really like, I will advise you to put your house on the market asap. The second you get an offer on your home, we should put an offer on the house you want. A seller will look favorably on that as they will know that you already have an accepted offer on your home. If the sale goes through you will be able to buy their home – this puts you in the same position (actually a little better position) as someone who makes an offer subject to financing.
A BONUS TIP!
If you really want to, you can even make the SALE of your home subject to being able to PURCHASE the home you want! There are all kinds of amazing creative options to draw up to protect you contractually! Many years ago, I wrote a subject to sale offer and drafted up a contract that protected my buyers from wasting $1,000 on inspections. Binding the seller to reimburse my buyers if he decided to accept a subsequent offer, it worked out… HE DID!
There are always exceptions to every rule, but IF you want all the ins and outs of subject to sale offers – I’m always up for a chat!